Housing Bottom? No, The Mother Of All Head Fakes

Interesting stuff, particularly the Mark Hanson observations on product mix judged against seasonality. By the way, had you seen this:

http://www.ritholtz.com/blog/2009/07/more-charts-on-new-home-sales/

Thanks for posting this. I too think the market has a way to go before recovery begins.

yep...that chart says it all.

we're going to have a lot more of the "it's not worse (although it might be) so its great" happy talk to live through.

Yes, let's just see what happens to all aspects of the housing market when the $8,500 first time buyer credit expires later this year.

I think they'll try and extend the $8,500 tax credit once it expires but even if they do, they can't stop all the foreclosures from happening as a result of people losing their jobs.

there is already a bill to increase the $8k tax credit to $15k. Besides, even if the credit does expire, it will have no affect on NYC because if you qualify for the credit, then you probably can't afford to buy in Manhattan due to the income limits.

there is no doubt in my mind that it will be extended at the last minute and perhaps even raised a bit. that's the ugly problem of or political situation. saying no does not get you elected.

Is the author of the article in the OP the Henry Blodget who was barred from the securities industry? If so, he has impeccable timing;

In early 2000, days before the dot-com bubble burst, Blodget personally invested $700,000 in tech stocks, only to lose most of it in the years that followed.

Perhaps the Blodget contrarian indicator.

It is my understanding that you have to close by Nov 30 to qualify for the 8k tax credit. So if closings take 60 days, these guys need to find something soon. But I agree with The Prez -- income limits will shut out buyers in Manhattan.

Don't we (america) realize that the $8,500 credit and the cash for clunkers stuff is simply us borrowing against our future? How much more debt are we going to take on to prop up our economy for the short run? Everything that's being done right now to prop up our economy (i.e. TARP, Stimulus, housing credit, cash for clunkers, etc.) is being funded by our children. At some point the service on our debt will literally crush our budget. At some date, in the not too distant future, we will be paying half of our budget on debt service. WTF is going on here? Where are the adults in the room who should be looking out for our long term interests? Or do we not give a sh#t? Sorry, I had to vent.

If the cash for clunkers program yields buying of U.S. cars made of U.S. parts by U.S. workers, then no, we are not creating debt for our children, we are only shifting monies around within the U.S.

I thought the proposed 15k tax credit didn't have any income restrictions.
http://online.wsj.com/article/SB124460195604101021.html
Or has this changed?

The $8,000 tax credit has an income restriction. You also cannot have owned a house within the last 3 years. I don't know about the $15k one.

"Don't we (america) realize that the $8,500 credit and the cash for clunkers stuff is simply us borrowing against our future? "

Did you see how fast they had to pull the plug because they realised we really couldn't afford the program? in other words, it was PR to make people think things were better and they hoped peopel "WOULDN'T take advantage of the program (or the people who devised it didn't bother to run any numbers before instituting it). I always wonder how people can do things where success leads to failure - it certainly means a failure to plan.

huh? pull what plug? i thought they just upped the ante for another two weeks. what did i miss?

they did not pull the plug on the cash for clunkers or the home buyer credit. The house of reps. just allocated another $2 billion for the car program. And the home buyer credit will liekly be doubled to $15k.

and the official website for the cash fo clunkers program ( www.esc.gov) is really something. If you agree to the terms and log in, your computer becomes the property of the federal government:

This application provides access to the DoT CARS system. When logged on to the CARS system, ****your computer is considered a Federal computer system and is the property of the United States Government.**** It is for authorized use only. Users (authorized or unauthorized) have no explicit or implicit expectation of privacy.

Any or all uses of this system and all files on this system may be intercepted, monitored, recorded, copied, audited, inspected, and disclosed to authorized CARS, DoT, and law enforcement personnel, as well as authorized officials of other agencies, both domestic and foreign. By using this system, the user consents to such interception, monitoring, recording, copying, auditing, inspection, and disclosure at the discretion CARS or the DoT personnel.

https://supplierpayments.esc.gov/OA_HTML/RF.jsp?function_id=28716&resp_id=-1&resp_appl_id=-1&security_group_id=0&lang_code=US&params=1QjBbvK328ZbUaSUNj3kbu7K3gvpagsk17LptZc1LOg

CMEACHAIR: People aren't buying just american cars with the cash-4-clunkers program. They may be buying mostly japanese cars, so our tax money may be making its way back to Tokyo or parts unknown. But I would agree that a program like this where you could ONLY buy an american car would be worth the money. If we could get people buying american cars agin, they would see the quality was back and their next purchase down the line might also be american. Of course they wouldn't do this because it would be unfair to the toyotas and hondas of the world who would complain that they employ americans and buy from american parts factories.

"They may be buying mostly japanese cars, so our tax money may be making its way back to Tokyo or parts unknown."

You do know that most foreign cars are made in the U.S., right? Nearly every foreign automaker has factories down south. And American car companies have factories in Mexico and Canada. In fact, the current Camaro, an American icon, is built in CANADA. So which car is American: The Canadian built Camaro or the American built Mercedes M Class?

Cars built by american workers are nice for american workers in terms of giving them a reason to have a job, but long term wealth creation in our country comes from cars built by american companies. Buying a Honda contributes to wealth creation in Japan, not the united states, even if the honda was put together by an american in this country.

Right - because only Japanese investors can buy stock in Japanese com-- Hang on a sec, OK? I have check the value of my Honda ADRs...

if Honda loses $2000 on each car it builds, thats hardly wealth creation. Same goes for GM. You could argue patriots should buy Japaneese as the are shifting the losses to Tokyo?

west81st, i don't think the direct intention of the cash for clunkers program is to provide money for shareholders. indirectly, of course if a company is healthier and has a higher share price, that's one thing.

this is, ostensibly, to get the car companies production up, and hopefully affect GDP and unemployment. i personally think it's just an incentive to get cars currently on the lots off them so dealers will be forced to restock. couldn't have one industry not going the inventory correction train.

The money from the program comes from additional debt to future American taxpayers. The money goes to millions of places, many of which are out of the country. The majority of the money will leave the country judging by the sales trends and relative successes of the American vs. foreign auto industries.

explain to me how and when a program like this can be ended. if demand falls off despite the additional funding, there will be pressure to raise the amount or loosen the qualifications. if the money continues to be gobbled up, there will be pressure for yet another round of funding. if the program is allowed to expire and demand falls off, there will be even greater pressure to renew or enhance the program.

the funny thing is most of you morons who are picking apart this successful Obama program, sat bye and not only didnt criticize the obviously stupid and failing Bush policies but you actually told anyone who criticized Bush as a terrorist and told them to leave the country.

Now when your team isnt in office, all of sudden you become political commentators and worried about deficits. (remember who started this mess and who "proved the government could run under deficits"

i think you're on the wrong board. i haven't heard many bush defenders here.

and from where does the majority of Obama's economic team originate?

Uranus?

you must be a killer at a cocktain party.

no, bush's anus.